Property

Property: DBSV note that monthly sales in Apr hit a high note with 1,788 units changing hands, +29% mom, the highest monthly sales YTD. Bulk of transactions came from 2 mass-market projects – MCL Land’s Eight Courtyards in Yishun and Hong Leong’s Hedges Park condominium, which made up 32% of the total. As sales are already 45-55% of house full year forecast of 10k-12k units, believe that primary private housing demand could exceed annual target but still end up below last year’s 16k+ units…..

However, the flipside is that govt would likely remain hawkish while waiting for supply mechanisms to kick in. In the mean time, possibility of revisiting the $8,000 income ceiling for primary public housing purchase over the next 6 mths, could add more uncertainty into mkt…..

Note that sector valuations are inexpensive but lacking near term catalysts. Sector House strategy would be to prefer stocks with a diversified exposure or strong capacity to deploy balance sheet. Top picks include UOL, Keppel Land and Capitaland.